Institutional investors remain largely unconvinced by crypto hedge fund strategies, according to Man Group and LGT Capital Partners, who say the asset class still carries more operational risk than reward, according to a report by Bloomberg.
Speaking at the Bloomberg Hedge Fund Forum, Roger Hilty, Partner at LGT Capital, described digital assets as “a fascinating space,” but cautioned that the focus for allocators remains capital preservation. “The return of your capital is more important than the return on your capital,” Hilty said, adding that crypto remains a small residual in LGT’s portfolio and that the firm isn’t ready to scale exposure aggressively.
The comments follow a renewed crypto selloff last week that wiped billions off the market amid escalating US-China trade tensions — a reminder of the asset class’s persistent volatility.
Adam Singleton, CIO of External Alpha at Man Group, echoed similar caution, saying investor flows are still being directed toward more established hedge fund strategies such as discretionary macro and equity market neutral, both of which have delivered strong returns this year.
While hedge fund managers continue to explore blockchain and digital assets from a research standpoint, both Man Group and LGT signalled that for now, mainstream institutional capital remains firmly on the sidelines of crypto-focused hedge fund investing.
